3. A Farm Fresh distribution centre has production capacity of 50,000 crates of ready meals (units) but in the next month sales volume is expected to be 35,000 units at a selling price of 40. Expected costs and revenues for the next month at an activity level of 35,000 units are: Dir Lab 12 420,000 Dir Mats 8 280,000 Var Manufacturing ones. 2 70,000 Fixed Manufacturing olds 8 280,000 Marketing and Distribution 3 105,000 Total costs 33 1,155,000 Sales 40 1,400,000 Profit 245,000 A new once off customer has offered to purchase 3,000 units next month at 20 a unit but requires their company logo to be attached to every product at an anticipated cost of 1 per unit. They will collect these crates from the distribution centre hence there will be no additional marketing or distribution costs. Currently labouris under utilised, 8 Page Required: Complete the schedule as per below and advise with reasons (including non- quantitative) whether the centre should accept or reject the offer. (10 marks) Do Not Accept Difference Units Accept 35.000 Order (Relevant Cost) Dir Lab 12 420,000 Dir 8 280,000 Mats Var Manufacturing olds 2 70,000 Inserting Logo 1 0 Fixed Manufacturing ohds 8 280,000 Marketing and Distribution 3 105,000 Total costs Sales Profit 33 1,155,000 40 1,400,000 245,000 PLEASE SHOW ALL WORKINGS, THANK YOU. L